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Council Votes 8-0 To Send Proposed Add'l Policy Re Fiscal Impact Statements In Agenda Items Back To Budget Oversight Committee For Discussion/Redrafting

  • Several Councilmembers Voice Concern That Requiring Financial Mgm't Review Before Agendizing Could Delay Their Items; Committee Chair Lowenthal Offers To Delete Applying That Req't For Councilmember-Agendized Items Before Item Is Sent Back To Her Committee

  • No Verbal Discussion Of Verbiage Letting Elected Officials Exempt Themselves From Financial Management Review If In Councilmember's Opinion His/Her Proposal Will Have No Fiscal Impact
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    (December 4, 2014) -- As seen LIVE and summarized on LBREPORT.com's front page, the City Council voted 8-0 (4th dist. vacant) to refer back to its Budget Oversight Committee (Lowenthal + Mungo + current vacancy) an item on Fiscal Impact Statements that are required to accompany agendized items. Five Councilmembers (Richardson, Uranga, Austin, Gonzalez, Andrews) variously voiced objections and could have killed a Committee proposal to add text to current Council policy -- that already requires a Fiscal Impact Statement with agendized items (on top of a separate city ordinance which also requires inclusion of a Fiscal Impact Statement with agenda items.)

    As brought forward by the Budget Oversight Committee, new text was proposed (full verbiage below) that required Financial Management review and modification "if needed to better describe the fiscal impact of items" proposed by an originating staff department or elected officials.

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    Below is current City Council policy alongside verbiage that the Budget Oversight Committee proposed adding:

    [current verbiage] Policy - For any proposed City Council action, an analysis shall be included with the description of that proposed action that describes the projected or potential impact on revenues and expenditures, and on the City's financial position, and, if significant, on the potential use of or diversion of City resources' such as staff, materials, or equipment. For any expenditure, the funding source must be identified as well as whether the expenditure has been budgeted and what the prior year expenditure was, where applicable, There should also be a discussion of any economic impacts to the City, if relevant.

    [proposed added verbiage] The fiscal impact may be prepared by the originating department or elected or appointed office, but must be reviewed by the Financial Management Department and is to be modified by Financial Management if needed to better describe the fiscal impact. The proposed City Council Letter should be submitted in accordance with normal administrative timeframe to allow for Financial Management Department review and comment. If time is not sufficient for the required Fiscal Impact analysis, Financial Management may hold the item, provide a preliminary fiscal impact analysis, or may indicate on the Council Letter fiscal impact statement that additional analysis and information is recommended.

    An elected official is not required to have a review by the Financial Management Department if in their opinion the proposed City Council item does not have any financial cost or other fiscal impact and its approval will not result in the use of significant staff time or require any significant diversion of resources. In such a case, the Fiscal Impact statement must be as follows: [Italicized in memo] "No financial cost or other fiscal impact and no significant staff work or other diversion of resources is intended with City Council's approval of this item..Action on this item is not to result in any Significant financial cost or fiscal impact, use of staff time or other resource diversion. As a result, the Financial Management Department has not been requested to perform a fiscal impact review."

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    Requiring Financial Management review for Councilmember-proposed items drew objections from Councilman Rex Richardson. The 9th district Councilman expressed concern that requiring Financial Management review could delay for weeks Council consideration of Councilmember-desired agenda items...and made a substitute motion seeking to ensure the new language wouldn't block or delay Councilmember agendized items...

    Councilman Richardson commented "if it ain't broke, don't fix it," prompting Councilwoman Suzie Price to say that in her view the current system is broken. Price cited a November 11 agenda item (brought by Councilwoman Lena Gonzalez, joined by Councilmembers Uranga and Austin on which Price and Mungo were the sole dissenters) which directed city management to negotiate a Citywide Project Labor Agreement (PLA) with the Los Angeles/Orange Counties Building And Construction Trades Council, and specified Craft Councils and Local Participants, and report back to the Council within 30 days. That agendized item, Price pointed accurately out, included a "Fiscal Impact Statement" that simply said "There is no fiscal impact."

    Financial Management Director John Gross said delay was not his intent. Councilmembers Lowenthal and Mungo said delay was not their intent. Councilwoman Mungo said -- in her opening and in response to Council objections -- that her motivation was to avoid having items reach the Council without providing a cost history and year over year costs...and she cited an item that failed to provide that information, leaving Councilmembers to ask those questions as they were asked to vote.

    At one point, Lowenthal blamed the issue on what she called "inartful" drafting [the text came from Gross' office but was advanced to the full Council by Lowenthal and Mungo voted action.]

    After listening quietly to the verbal exchanges, Councilman Roberto Uranga made a substitute-substitute motion that was more blunt: "receive and file" (take no action on the Lowenthal-Mungo advanced item.) Gonzalez sided with Uranga and simple math showed the Lowenthal-Mungo item might go down to a slap-back defeat.

    Vice Mayor Lowenthal offered to remove the verbiage applicable to Council agendized items; Uranga was unmoved. Lowenthal was reduced to publicly asking Uranga to refer the item back to her committee for additional action...and Uranga agreed.

    The bottom line: the Fiscal Impact Statement item will receive additional discussion and presumably some verbal changes in the Budget Oversight Committee (Lowenthal + Mungo + a current vacancy) and come back to the Council.

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    One issue received NO verbal public discussion by Councilmembers on Dec. 2 (or previously by the Budget Oversight Committee.) Under the proposed change, LB elected officials -- including the Mayor -- could avoid including a management reviewed Fiscal Impact Statement if -- in the elected official's opinion -- their item would have no financial cost or other fiscal impact, or use significant staff time or require a significant diversion of resources.

    Under the text that was brought forward, Councilmembers could compose their own Fiscal Impact Statements, with review required by management for proposals if the elected official effectively acknowledged there would be some fiscal impact. Below is the verbiage brought to the Council by the Budget Oversight Committee...and not mentioned publicly by the Council.

    "No financial cost or other fiscal impact and no significant staff work or other diversion of resources is intended with City Council's approval of this item..Action on this item is not to result in any Significant financial cost or fiscal impact, use of staff time or other resource diversion. As a result, the Financial Management Department has not been requested to perform a fiscal impact review."

    Developing.

    Developing.


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